Finances shadow Realtor's leadership

Oct. 1, 2012

Updated Aug. 21, 2013 1:17 p.m.

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Orange County broker Gary Thomas will be sworn in as president of the National Association of Realtors on Nov. 8 at NAR's annual convention in Orlando, Fla. H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

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Gary Thomas, 68, of Mission Viejo was reaffirmed as the next president of the National Association of Realtors after a challenge was raised by a top executive at the RE/MAX real estate chain. H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

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Thomas began his service to "the Realtor family" with the then Saddleback Board of Realtors, and over the past quarter century moved into such jobs as state Realtor treasurer, president, national regional vice president and national president-elect. He will become the 2013 president at the National Association of Realtor's conference in November at Orlando, Fla. H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

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Gary Thomas, 68, outside his Evergreen Realty office in Villa Park. Until his bankruptcy, Thomas owned and operated a chain of up to 14 real estate offices from Aliso Viejo to Anaheim Hills. Thomas' creditors are expected to get pennies on the dollar after his bankruptcies wrap up. He listed more than $13 million in debts. H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

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The sign over Gary Thomas' sole realty office still sports the name of a previous company he owned, Altera Real Estate. It will be updated with an Evergreen Realty sign, the name of his current business located in Villa Park. He once operated 14 offices. H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

Orange County broker Gary Thomas will be sworn in as president of the National Association of Realtors on Nov. 8 at NAR's annual convention in Orlando, Fla.H. LORREN AU JR., THE ORANGE COUNTY REGISTER, TEXT BY JEFF COLLINS, THE ORANGE COUNTY REGISTER

By applying his powers of "strategic thinking," the Mission Viejo Realtor helped streamline his profession, consolidating a balkanized collection of small associations and listing services into bigger, more efficient groups.

He formed for-profit business units to help subsidize Realtor operations and he created standardized forms to improve the industry's professionalism.

He did it first in Orange County, then throughout California. Now, he's training his sights on the nation.

On Nov. 8, Thomas, 68, will be elevated to the highest office in realty, taking the oath as the 2013 president of the National Association of Realtors. He will be the first NAR president from Orange County in at least 84 years.

"I can make a difference," Thomas said at his real estate office in Villa Park last week. "A lot of leaders come in and are on autopilot. I like to come in, look ahead and make things even better."

But others say Thomas is unfit to lead the nation's foremost real estate group because he filed for personal and corporate bankruptcy in the past 17 months, walking away from millions of dollars in debts.

"Is there credibility in this person leading our industry and being the voice for 1 million-plus (NAR) members?" asked RE/MAX President Vinnie Tracey, who's so opposed to Thomas becoming president he asked the NAR board to give him the boot.

"The NAR president should be the best and the brightest. He should be a pillar of the industry and be beyond reproach," Tracey said.

Supporters counter that you can't blame a Realtor for misfortunes suffered in the worst real estate crash in 70 years.

"I've dealt with so many people that have had significant business reversals in the last five years," said Joel Singer, executive vice president of the California Association of Realtors and a 25-year acquaintance of Thomas'. "That, to me, is unfortunate, but hardly unique."

Sales acumen

Gary Okla Thomas was born in Joplin, Mo., and grew up in Manhattan Beach.

He got his middle name from his dad, named by an Oklahoma teacher who was a Sooner through and through.

Father Okla Thomas' twin brother's name? Homa.

Thomas got his real estate acumen from his parents, who ran Sea Realty in Manhattan Beach.

Thomas had been working for State Farm Insurance for about 10 years when co-workers at the Santa Ana office became curious about his life as a resident of Mission Viejo, a new town when Thomas and his wife, Frances, moved there in 1969.

"I would bring them down and show them around," Thomas said. "I thought, 'Well, maybe I should get my (real estate) license and sell.' "

He did, and after just six months, he was making twice as much in real estate as he was at his day job. He soon quit State Farm, and within 10 years, was running his own RE/MAX office. Eventually, he owned 14 RE/MAX offices from Aliso Viejo to Anaheim Hills.

Making a difference

In the mid-1980s, Thomas was asked to join the budget and finance committee of what was then the Saddleback Board of Realtors.

Through the years, he rose through the ranks, becoming Saddleback's treasurer and president, a board member of the California Association of Realtors and, in 2001, the statewide association president.

He kept at it because he enjoyed the work and because he made a difference.

Thomas became a leader in the battle to merge eight to 10 separate Realtor boards into today's two dominant groups – the Orange County and the Pacific West associations of Realtors.

He also got involved in merging separate multiple listing services, or MLS's, first in Orange County, then in the state as a whole.

When NAR began forming a committee to link efforts of MLS's nationwide, Thomas was named its chairman.

"Gary was very instrumental in planting the seeds for a statewide MLS. He was the one behind it," said Nancy Gilmore, CEO of the Pacific West Association of Realtors.

Bankruptcy and debt

But the housing crash of the past seven years hit Thomas' business hard.

To save money, Thomas quit RE/MAX and formed his own chain, Altera Real Estate.

In late 2008, RE/MAX sued Thomas for failing to pay more than $1.7 million in fees and dues owed under his franchise agreement. He settled out of court for $1.2 million.

Court records show several lawsuits filed by landlords accusing Altera of failing to pay rent.

In January 2011, an Altera Real Estate agent sued Thomas, accusing him of failing to pay $128,000 in commissions she had earned from the sale of five homes. When she asked for payment, Thomas told her Altera had used her commissions to cover operating expenses, the lawsuit said.

Fifteen days after the agent sued, Thomas' corporation filed for bankruptcy. He filed for personal bankruptcy this past June.

The combined personal and corporate debts from the two bankruptcies totaled $13.2 million, while the combined assets totaled $1.7 million.

Thomas' creditors likely will get pennies on the dollar when the bankruptcies are completed.

In May 2011, Newport Beach Realtor and landlord Bill Cote sued Thomas for failing to pay about $58,000 in rent for an Altera office in Corona del Mar, court records show. Because of the bankruptcy, Cote hasn't been paid.

"He was a payment problem nearly from the moment he took occupancy," Cote said recently. Thomas denied the accusation.

After the bankruptcies, Thomas' empire shrank to one Evergreen Realty office in Villa Park. In June, he sold his Coto de Caza home for less than he owed on it and moved into an apartment. He said it may be a year or two before he can become a homeowner again.

Questions raised

RE/MAX's Vinnie Tracey said he began advocating in January that NAR prevent Thomas – now the president-elect – not be elevated to president.

Last March, he met in Chicago with NAR Executive Vice President Dale Stinton, NAR President Maurice Veissi, past President Ron Phipps and other board members and made his final pitch.

"I don't think this is good for the industry," Tracey recalled telling the NAR brass. "We have an obligation to let people know who (Thomas) is. I'm the guy standing up for what's right."

NAR President Moe Veissi said a long and arduous vetting process took place over years before Thomas was picked for president and that an additional inquiry was launched in response to Tracey's concerns. Thomas answered questions to the board's satisfaction.

"It's at least a five- to seven-year process to get into a position to be considered as president," Veissi said. "He's been vetted and is qualified to lead the National Association of Realtors."

Tracey concedes that Thomas didn't do anything morally wrong. But he worries that his bankruptcy and financial problems could be a distraction – if not an embarrassment for Realtors.

"The real truth is hundreds of thousands of Realtors didn't file bankruptcy and managed their businesses -- and honored their commitments," Tracey said.

Cote, the Newport Beach landlord, agreed.

"He is fiscally and financially unqualified to lead the largest real estate trade organization in this country," Cote said. "He walked away from all of his responsibilities, both corporate and personal."

A strong hand

About half of 30 agents now working for Thomas stuck with him through the bankruptcy. Associates up and down the Realtor ranks called him a man of integrity, competence and class.

"Some came up through the ranks through different avenues. Gary came up as a working broker, someone who understands people's businesses," said Vince Malta, one of several former CAR presidents interviewed for this story. "He not only knows the public policy side, he knows the business side of the organization."

Long-time associates say that Thomas is a consensus builder, a good listener with a calm, reassuring demeanor. He's a quiet force with a strong hand, associates said. A high-energy guy who makes good use of his time.

"Has he had some unfortunate situations? Like all of us, yes," said former NAR President Dick Gaylord of Long Beach. "But I don't think anyone thinks he's anything but competent, hardworking and honest."

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